As the U.S. tries to convince allies to adopt similar export controls against China (see 2210270047 and 2210070049), some trading partners have voiced concerns over the U.S.’s strategy, saying they would rather have worked on crafting restrictions alongside the U.S. as opposed to having controls forced upon them, a Commerce Department official said.
Sen. Mark Warner, D-Va., one of the primary movers behind the Chips Act, told an audience that more domains need policymakers' attention so that they don't wake up to find that China has become dominant in an important emerging technology. He noted that before becoming a politician, he "was in the telecommunication space," and said that realizing that China is dominating 5G with two heavily subsidized champion companies was the "final wake-up call" that engagement and deeper trade with China is not the right way to go.
A Chinese invasion of Taiwan, or any other type of “conflict” initiated against the island by Beijing, would have “immediate and dramatically negative effects on China’s ability to import and export goods” and would spur a range of international sanctions, the Center for Strategic and International Studies said in a Nov. 22 report. CSIS said the U.S. and other Western countries would impose strict sanctions and export controls against China, which would “probably persist for months or perhaps years after a conflict, even if U.S. military forces are defeated” in the case of a war.
Semiconductor companies are still awaiting licensing decisions on their chip-related activities involving China under the U.S.’s new export controls, with some concerned that licenses awarded to their competitors could hurt their revenue. In earnings calls and filings with the Securities and Exchange Commission this month, U.S. chip and technology companies said they continue to prepare for drops in sales to China and that they fear Chinese customers may soon replace them with alternative suppliers, causing some U.S. companies to permanently lose their market share in China.
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The U.S. needs to provide universities with clearer guidance on what types of research activities they can conduct and share with China, the Massachusetts Institute of Technology said in a report this week. The report, authored by MIT’s China Strategy Group, said U.S. schools face challenges managing outside “pressures” while also “preserving open scientific research,” which risks damaging American research abilities and chilling technology collaboration.
The U.S. needs to abandon the current model of multilateral export control regimes and move toward control agreements with smaller groups of allies in specific technology areas, said Liza Tobin, the National Security Council’s former China director. Tobin, speaking during an Emerging Technology Technical Advisory Committee meeting last week, also said the U.S. should look to impose technology-specific controls on items destined to China rather than end-use- and end-user-based controls, which are proving increasingly ineffective.
The Bureau of Industry and Security’s new Unverified List policies, which allow the agency to move a company from the UVL to the Entity List if it can’t complete an end-use check within 60 days, likely will lead to an uptick in companies added to the Entity List, said Nazak Nikahtar, former acting BIS undersecretary. Nikakhtar said she believes many Chinese companies added to the UVL won’t participate in an end-use check that meets the U.S.’s standards.
The U.K. this week ordered a subsidiary of China’s Wingtech Technology to divest from Britain's largest microchip facility, Nexperia Newport (formerly Newport Wafer Lab), several months after U.S. lawmakers urged the Biden administration to intervene in the acquisition. The U.K.’s Department for Business, Energy & Industrial Strategy’s decision will force Wingtech’s subsidiary, Netherlands-based Nexperia, to sell at least 86% of its stake in Nexperia Newport “within a specified period and by following a specified process.” Nexperia acquired the stake in then Newport Wafer Lab in 2021.
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